One or two unnamed commercial banks are yet to remit state revenues to the Federal Government in line with the Treasury Single Account (TSA) policy, Finance Minister Mrs Kemi Adeosun, has said.
“We have written to all banks,” Adeosun told CNBC, adding that one or two lenders were yet to move revenues to the new account.
In 2015, Nigeria decided to move government revenues to a TSA account at the Central Bank as part of an anti-corruption drive, draining the banking system of liquidity.
The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets consolidated view of its financial status at any given time.
The TSA policy – initiated by the administration of former President Goodluck Jonathan but implemented by his successor, President Muhammadu Buhari’s administration – stipulates that all government taxes, levies and tariffs should be deposited with the Central Bank of Nigeria (CBN).
The funds would subsequently be disbursed to Ministries, Departments and Agencies (MDAs) based on approved rules to ensure accountability in the management of government resources.
Several attempts to adopt TSA in the past were unsuccessful. Reason: the CBN lacked the technological-know-how to manage the retail aspect of the policy. An e-technology platform, Real-time gross settlement systems (RTGS), initially expected to drive the payment leg of the TSA policy in Nigeria was unsuitable for retail payments.
The implementation of the TSA policy has significantly reduced government’s debt servicing costs, lowered liquidity reserve needs, and fostered effective use of surplus cash.
Beyond transparency and accountability, the TSA introduces economy and efficiency into overall management of public finances and this will in the long run, lead to effectiveness of the government spending since it places the government in a better position to realise overall policy goals.